By Javi West Larrañaga and Mireia Merino
(Reuters) -Shares of Spanish travel booking company eDreams ODIGEO fell more than 10% on Tuesday after the company announced slower subscriber growth in April-June compared with the previous quarter.
The company said its Prime membership — which now accounts for about 75% of its revenue — grew by 20% year-on-year to 7.5 million users, slowing from a 25% increase in the previous three month period.
Its shares were down 10.6% to 7.65 euros ($8.96) in late morning trading, while the IBEX-35 blue-chip index fell 1.1%.
While subscriptions are common in other industries, such as music, television and telecoms, eDreams pioneered a membership model giving customers access to discounted airlines and hotel bookings through its website. They pay a flat annual fee of 80 to 100 euros.
Though global air travel demand is growing at a slower pace than expected by airlines body IATA, eDreams’ transition to a subscription-based business has shielded it from industry fluctuations.
As a result of the increase in subscribers, the company swung to a net profit of 13.6 million euros in the April to June period, the first quarter of its accounting year, from a net loss of 1.2 million euros in the same period last year.
The company reiterated its guidance, saying it expects its cash earnings before interest, taxes, depreciation and amortization to rise to between 215 million euros and 220 million euros in the fiscal year ending on March 31, 2026, up from 180 million euros last year.
($1 = 0.8542 euros)
(Reporting Javi West Larrañaga and Mireia Merino; Editing by Inti Landauro anad Kim Coghill)
